When you are on a tight budget the first step you can do is learn How to Stop Wasting Money. The money you already have is important to keep so don’t waste it! Instead, use these tips to keep your hard earned money wear it belongs – your wallet.
You’ll also likely enjoy this free printable 52-week money saving challenge.
When was the last time you wasted money?
If you’re really honest with yourself, it’s likely the answer will be most days.
I know I use to make unnecessary purchases or act wastefully with regards to our personal household finances and that was never a good plan.
The truth is, we are all guilty of buying things that we don’t truly need in a effort to keep up with the Joneses (something Dave Ramsey preaches) or bolster our self-esteem. These are called emotional purchases.
Emotional purchases seem to be the more dangerous kind because we make these purchases when we are feeling down or in need of some excitement, which means we are not in the right state of mind.
Aside from emotional purchases, we can make extravagant purchases based on our interests and interests of others such as our hobbies and entertainment with family and friends. Again, we try to keep up with a lifestyle we often cannot afford.
Other things we tend to waste money on include:
- Smoking/Drinking habits
- Unused subscriptions and memberships
- Not shopping around for the best deals for the bills that we pay
- Eating/Dining out too often
- Not eating the food we have in our home (and it expiring before we do)
- Wants that we place on a credit card
- New cars (these go down in value)
- New items that depreciate in value such as furniture, clothing, etc.
Indeed, many adults have no idea how to set and stick to a simple personal budget, and the easy availability of credit combined with the reality TV and Instagram culture makes us expect to live the high life on any salary – until it all catches up with us.
The effect of serious debt on our lives can be utterly crippling, leaving us drowning in stress and affecting our physical and mental health. It’s time for a serious rethink.
So, what can we do to fix this problem and stop wasting our money?
How to Stop Wasting Money
Reset Your Financial Thinking
Money is something we can easily feel disconnected from in this digital age – it flows into our accounts and out again in a series of cashless transactions. Somehow those figures on the credit card statement every month seem abstract and the price we pay for things and their actual value are all abstracts.
Reset your financial thinking by ditching the plastic credit and debit cards and utilizing cash. As Dave Ramsey says “Cash is King!”
Changing our financial mindsets is a hugely important first step – to avoiding debt, to living a better life, and to achieving the big, longer term dreams we have – whether that is funding a qualification for a new career, saving up to go traveling and exploring the world, purchasing a dream home or helping our children out.
Start by beginning to think about money as what it really is – a form of energy. We expend mental and physical energy at work, and are repaid in currency. The money represents our energy and life force – we have literally expended some of our life in exchange for our salary. Therefore, wasting money is directly comparable to wasting our lives. That energy which your money represents is important – it can really be used to do things for you – so wasting it becomes hugely negative.
I believe feeling the physical money helps shift your mind and reconnect you with your hard work and the money you earned, not the fake money given on credit.
Forget The Price Of Modern Living
We live in a fast-paced, constantly connected world where we expect things instantly – and that has serious financial implications.
Not only are we comfortable with paying a premium for convenience – think of Amazon Prime memberships offering next day delivery or even the cost of pre-prepared bagged salad compared to the ingredients – and you’ll see how insidious this notion of instant gratification is.
Credit cards are a symptom of this – enabling us to purchase things we can’t afford without getting into the habit of saving (again, read the tip above about cash).
Most of us are paying way too much interest because we simply don’t understand how APR works, or how much cash it would save us to switch to a lower rate or use savings to pay off our balance.
My big tip here – get back to the basics.
Look at the expenses you NEED which is commonly called the four walls – shelter (including utilities), food, transportation and clothing.
If it doesn’t fit into one of those 4 categories, get rid of it and then slowly add back in those expenses until you are in a comfortable financial state.
Look to save money on daily living expenses like energy costs. Our phones and tablets are also a price of modern living – many people waste money by being on a plan that isn’t suitable for their needs.
Using something like https://smarty.co.uk/sim-onlyto get the best deal on data and making do with a perfectly fine older handset can save a lot of cash.
Another factor of modern living is our over-reliance on cars to get us places.
Running a car is a huge expense – from the initial purchase and payment of a car loan to the costs of fuel, maintenance, servicing, insurance and parking. Question whether you could do without your wheels.
Many city dwellers are finding that joining a car club means they can have access to a vehicle when they need it, without bearing the full cost of the asset. Maybe Uber or carpool. You could even ride a bike (if close enough) in the warmer months.
Even if you can’t do without a car overall, you can look for ways to cut down on how much you use it or how much you pay. For example, if you’re upside down in your car or your car payment is high, sell it and pay cash for a reliable car until you’re able to afford paying for something in cash that is a bit nicer.
My third and final tip on how to avoid wasting money is to avoid the temptations.
I am a crafter and that means I love all things crafty, DIY and home decor. With that being said, Hobby Lobby can be a dangerous place for me. Especially when they give that constant 40% off coupon code!
So, while I still visit my local Hobby Lobby every once in a while, I avoid going there as much as possible. This helps prevent me from going over budget and overspending or wasting money on things I truly don’t need (trust me, I have bins full of brand new craft supplies).
If you know you are someone that has a hard time turning down a sale or good deal you come across, avoid the temptation by avoiding the store altogether.
If you can’t avoid the store, then avoid certain sections of a store (like the clearance isle) that will tempt you to buy and waste your money.
Trust me, this is easier said than done and I’ve been able to hold onto more of my money by avoiding regular trips to Hobby Lobby and Target every week.
I surely hope these tips will help you learn how to stop wasting money and start saving towards a more stable financial future!